Exhibit 10.12


 


Executed
Version




 





 


FIRST LIEN
COLLATERAL AGREEMENT


 


dated as of January 16,
2008


 


by and among


 


GLOBAL
GEOPHYSICAL SERVICES, INC.


 


and


 


CERTAIN
SUBSIDIARIES OF


GLOBAL
GEOPHYSICAL SERVICES, INC.


as Grantors


 


in favor of


 


CREDIT SUISSE,


as Collateral Agent




 





 

















 


TABLE OF
CONTENTS


 


	
   

  	
  PAGE

  
	
   

  	
   

  
	
  ARTICLE 1

  	
   

  
	
  DEFINED TERMS

  	
   

  
	
   

  	
   

  
	
  Section 1.01.  Terms Defined in the Uniform Commercial Code

  	
  2

  
	
  Section 1.02.  Definitions

  	
  2

  
	
  Section 1.03.  Other Definitional Provisions

  	
  7

  
	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  SECURITY INTEREST

  	
   

  
	
   

  	
   

  
	
  Section 2.01.  Grant of Security Interest

  	
  7

  
	
  Section 2.02.  Grantors Remain Liable

  	
  8

  
	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  Section 3.01.  Existence

  	
  9

  
	
  Section 3.02.  Authorization of Agreement; No Conflict

  	
  9

  
	
  Section 3.03.  Consents

  	
  9

  
	
  Section 3.04.  Perfected First Priority Liens

  	
  10

  
	
  Section 3.05.  Title; No Other Liens

  	
  10

  
	
  Section 3.06.  State of Organization; Location of Inventory; Equipment and
  Fixtures; Other Information

  	
  10

  
	
  Section 3.07.  Accounts

  	
  11

  
	
  Section 3.08.  Chattel Paper

  	
  11

  
	
  Section 3.09.  Commercial Tort Claims

  	
  11

  
	
  Section 3.10.  Deposit Accounts

  	
  11

  
	
  Section 3.11.  Intellectual Property

  	
  12

  
	
  Section 3.12.  Inventory

  	
  12

  
	
  Section 3.13.  Investment Property; Partnership/LLC Interests

  	
  12

  
	
  Section 3.14.  Instruments

  	
  12

  
	
  Section 3.15.  Representations in Credit Agreement

  	
  13

  
	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 4.01.  Maintenance of Perfected Security Interest; Further
  Information

  	
  13

  



 


i

















 


	
  Section 4.02.  Maintenance of Insurance

  	
  13

  
	
  Section 4.03.  Changes in Locations; Changes in Name or Structure

  	
  13

  
	
  Section 4.04.  Required Notifications

  	
  14

  
	
  Section 4.05.  Delivery Covenants

  	
  14

  
	
  Section 4.06.  Control Covenants.

  	
  15

  
	
  Section 4.07.  Filing Covenants

  	
  16

  
	
  Section 4.08.  Accounts

  	
  16

  
	
  Section 4.09.  Intellectual Property

  	
  17

  
	
  Section 4.10.  Investment Property; Partnership/LLC Interests

  	
  18

  
	
  Section 4.11.  Equipment

  	
  19

  
	
  Section 4.12.  Vehicles

  	
  19

  
	
  Section 4.13.  Further Assurances

  	
  19

  
	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
  REMEDIAL PROVISIONS

  	
   

  
	
   

  	
   

  
	
  Section 5.01.  General Remedies

  	
  20

  
	
  Section 5.02.  Specific Remedies

  	
  20

  
	
  Section 5.03.  Private Sale

  	
  23

  
	
  Section 5.04.  Application of Proceeds

  	
  23

  
	
  Section 5.05.  Waiver; Deficiency

  	
  24

  
	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
  THE COLLATERAL AGENT

  	
   

  
	
   

  	
   

  
	
  Section 6.01.  Collateral Agent’s Appointment as Attorney-in-fact

  	
  25

  
	
  Section 6.02.  Duty of Collateral Agent

  	
  27

  
	
  Section 6.03.  Authority of Collateral Agent

  	
  27

  
	
   

  	
   

  
	
  ARTICLE 7

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 7.01.  Amendments in Writing

  	
  27

  
	
  Section 7.02.  Notices

  	
  28

  
	
  Section 7.03.  No Waiver by Course of Conduct; Cumulative Remedies

  	
  28

  
	
  Section 7.04.  Enforcement Expenses; Indemnification

  	
  28

  
	
  Section 7.05.  Waiver of Jury Trial; Preservation of Remedies

  	
  29

  
	
  Section 7.06.  Successors and Assigns

  	
  29

  
	
  Section 7.07.  Setoff

  	
  29

  
	
  Section 7.08.  Counterparts

  	
  30

  
	
  Section 7.09.  Severability

  	
  30

  
	
  Section 7.10.  Section Headings

  	
  30

  
	
  Section 7.11.  Integration

  	
  30

  
	
  Section 7.12.  Governing Law

  	
  31

  
	
  Section 7.13.  Jurisdiction; Consent to Service of Process

  	
  31

  



 


ii

















 


	
  Section 7.14.  Acknowledgements

  	
  31

  
	
  Section 7.15.  Additional Grantors

  	
  32

  
	
  Section 7.16.  Releases

  	
  32

  



 


	
  EXHIBITS:

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Perfection Certificate

  
	
   

  	
   

  
	
  SCHEDULES:

  	
   

  
	
   

  	
   

  
	
  Schedule 3.6

  	
  Exact Legal Name; Jurisdiction of
  Organization; Taxpayer Identification Number; Registered Organization Number;
  Mailing Address; Chief Executive Office and other Locations

  
	
  Schedule 3.9

  	
  Commercial Tort Claims

  
	
  Schedule
  3.10

  	
  Deposit Accounts

  
	
  Schedule
  3.11

  	
  Intellectual Property

  
	
  Schedule
  3.13

  	
  Investment Property and Partnership/LLC
  Interests

  
	
  Schedule
  3.14

  	
  Notes

  



 


iii

















 


FIRST LIEN
COLLATERAL AGREEMENT (this “Agreement”),
dated as of January 16, 2008, by and among GLOBAL GEOPHYSICAL SERVICES,
INC., a Delaware corporation (the “Borrower”), GGS
INTERNATIONAL HOLDINGS, INC., a Texas corporation (“GGS
International”), AUTOSEIS, INC., a Texas corporation (“Autoseis”) and any Additional Grantor (as defined below) who
may become party to this Agreement (Autoseis, GGS International and such
Additional Grantors, collectively, with the Borrower, the “Grantors”
and each, a “Grantor”), in favor of CREDIT
SUISSE, as first lien Collateral Agent (in such capacity, the “Collateral Agent”) for the ratable benefit of the Secured
Parties (such term and each other capitalized term used but not defined herein
having the meaning assigned thereto in the Credit Agreement), including the
banks and other financial institutions (the “Lenders”)
from time to time parties to the First Lien Credit Agreement, dated of even date
herewith (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among
the Borrower, the Lenders from time to time party thereto and Credit Suisse, as
Administrative Agent (in such capacity, the “Administrative
Agent”).


 


STATEMENT OF
PURPOSE


 


Pursuant to
the Credit Agreement, the Lenders have agreed to make Loans to the Borrower and
the Issuing Bank has agreed to issue Letters of Credit upon the terms and
subject to the conditions set forth therein.


 


Pursuant to
the terms of the First Lien Guaranty Agreement of even date herewith (as
amended, restated, supplemented or otherwise modified from time to time, the “Guaranty Agreement”), by certain Subsidiaries of the
Borrower in favor of the Administrative Agent, certain Subsidiaries of the
Borrower who are parties thereto have guaranteed payment and performance of the
Obligations of the Borrower.


 


It is a
condition precedent to the obligations of the Lenders to make their respective
Loans to the Borrower and the Issuing Bank to issue Letters of Credit under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Collateral Agent, for the ratable benefit of itself and the
other Secured Parties.


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement, to
induce the Lenders to make their respective Loans to the Borrower and the
Issuing Bank to issue Letters of Credit thereunder and to induce the entry into
any Financial Hedging Agreement by the Secured Party counterparty thereto, each
Grantor hereby agrees with the Collateral Agent, for the ratable benefit of
itself and the other Secured Parties, as follows:


 


1

















 


ARTICLE 1

DEFINED TERMS


 


Section 1.01.  Terms Defined in the Uniform Commercial Code.


 


(a)                                  The
following terms when used in this Agreement shall have the meanings assigned to
them in the UCC (as defined in Section 1.02 below) as in effect from time
to time:  “Account”, “Account Debtor”, “Authenticate”,
“Certificated Security”, “Chattel Paper”, “Commercial Tort Claim”, “Deposit
Account”, “Documents”, “Electronic Chattel Paper”, “Equipment”, “Farm Products”,
“Fixture”, “General Intangible”, “Instrument”, “Inventory”, “Investment Company
Security”, “Investment Property”, “Issuer”, “Letter of Credit Rights”, “Proceeds”,
“Record”, “Registered Organization”, “Security”, “Security Entitlement”, “Securities
Intermediary”, “Securities Account”, “Supporting Obligation”, “Tangible Chattel
Paper” and “Uncertificated Security”.


 


(b)                                 Terms
defined in the UCC and not otherwise defined herein or in the Credit Agreement
shall have the meaning assigned in the UCC as in effect from time to time.


 


Section 1.02.  Definitions. 
The following terms when used in this Agreement shall have
the meanings assigned to them below:


 


“Additional Grantor” means each Subsidiary of the Borrower
which hereafter becomes a Grantor pursuant to Section 7.15 hereof and Section 5.14
of the Credit Agreement.


 


“Agreement” means this Collateral Agreement, as amended,
restated, supplemented or otherwise modified from time to time.


 


“Applicable Insolvency Laws” means all Applicable Laws
governing bankruptcy, reorganization, arrangement, adjustment of debts, relief
of debtors, dissolution, insolvency, fraudulent transfers or conveyances or
other similar laws (including, without limitation, 11 U.S.C. Sections 544, 547,
548 and 550 and other “avoidance” provisions of Title 11 of the United States
Code, as amended or supplemented).


 


“Assignment of Claims Act” means the Assignment of Claims Act
of 1940 (41 U.S.C. Section 15, 31 U.S.C. Section 3737, and 31 U.S.C. Section 3727),
including all amendments thereto and regulations promulgated thereunder.


 


“Cash Management Obligations” means overdrafts, returned
items and related liabilities and all indemnification obligations now or
hereafter owing by any Grantor to Credit Suisse, any Affiliate thereof or the
Administrative Agent arising from or in connection with treasury, depositary or
cash management


 


2

















 


services or in
connection with any automated clearinghouse transfer of funds for the benefit
of such Grantor.


 


“Collateral” has the meaning assigned thereto in Section 2.01.


 


“Collateral Account” means any collateral account established
by the Collateral Agent as provided in Section 5.02.


 


“Control” means the manner in which “control” is achieved
under the UCC with respect to any Collateral for which the UCC specifies a
method of achieving “control”.


 


“Controlled Depository” has the meaning assigned thereto in Section 4.06(a).


 


“Copyrights” means collectively, all of the following of any
Grantor: (a) all copyrights, rights and interests in copyrights, works
protectable by copyright, copyright registrations and copyright applications
anywhere in the world, including, without limitation, those listed on Schedule
3.11 hereto, (b) all reissues, extensions, continuations (in whole or in
part) and renewals of any of the foregoing, (c) all income, royalties,
damages and payments now or hereafter due and/or payable under any of the
foregoing or with respect to any of the foregoing, including, without
limitation, damages or payments for past or future infringements of any of the
foregoing, (d) the right to sue for past, present and future infringements
of any of the foregoing and (e) all rights corresponding to any of the
foregoing throughout the world.


 


“Copyright Licenses” means any written agreement naming any
Grantor as licensor or licensee, including, without limitation, those listed in
Schedule 3.11, granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and sell
materials derived from any Copyright.


 


“Dispute” means any action, suit or proceeding pending
against or in any other way relating adversely to or affecting any party hereto
or any of their respective properties in any court or before any arbitrator of
any kind or before or by any Governmental Authority.


 


“Effective Endorsement and Assignment”  means, with respect to any specific type of
Collateral, all such endorsements, assignments and other instruments of
transfer requested by the Collateral Agent with respect to the Security
Interest granted in such Collateral, and in each case, in form and substance
satisfactory to the Collateral Agent.


 


3

















 


“Government Contract” means a contract between any Grantor
and an agency, department or instrumentality of the United States or any state,
municipal or local Governmental Authority located in the United States or all
obligations of any such Governmental Authority arising under any Account now or
hereafter owing by any such Governmental Authority, as account debtor, to any
Grantor.


 


“Grantors” has the meaning set forth in the introductory
paragraph of this Agreement.


 


“Guarantors” means the collective reference to each Person
executing the Guaranty Agreement.


 


“Guaranty Agreement” has the meaning set forth in the
Statement of Purpose of this Agreement.


 


“Intellectual Property” means collectively, all of the
following of any Grantor: (a) all systems software, applications software
and internet rights, including, without limitation, screen displays and
formats, internet domain names, web sites (including web links), program
structures, sequence and organization, all documentation for such software,
including, without limitation, user manuals, flowcharts, programmer’s notes,
functional specifications, and operations manuals, all formulas, processes,
ideas and know-how embodied in any of the foregoing, and all program materials,
flowcharts, notes and outlines created in connection with any of the foregoing,
whether or not patentable or copyrightable, (b) concepts, discoveries,
improvements and ideas, (c) any useful information relating to the items
described in clause (a) or (b), including know-how, technology, engineering
drawings, reports, design information, trade secrets, practices, laboratory
notebooks, specifications, test procedures, maintenance manuals, research,
development, manufacturing, marketing, merchandising, selling, purchasing and
accounting, (d) Patents and Patent Licenses, Copyrights and Copyright
Licenses, Trademarks and Trademark Licenses, and (e) other licenses to use
any of the items described in the foregoing clauses (a), (b), (c) and (d) or
any other similar items of such Grantor necessary for the conduct of its
business.


 


“Issuer” means any issuer of any Investment Property or
Partnership/LLC Interests (including, without limitation, any Issuer as defined
in the UCC).


 


“Material Contracts” has the meaning assigned thereto in the
Credit Agreement.


 


“Obligations” means with respect to the Borrower, the meaning
assigned thereto in the Credit Agreement, and with respect to each Guarantor,
the obligations of such Guarantor under the Guaranty Agreement executed by such
Guarantor and with respect to all Grantors, all liabilities and obligations of
the


 


4

















 


Grantors
hereunder and all liabilities and obligations of the Grantors with respect to
any Cash Management Obligations.


 


“Partnership/LLC Interests” means, with respect to any
Grantor, the entire partnership, membership interest or limited liability
company interest, as applicable, of such Grantor in each partnership, limited
partnership or limited liability company owned thereby, including, without
limitation, such Grantor’s capital account, its interest as a partner or
member, as applicable, in the net cash flow, net profit and net loss, and items
of income, gain, loss, deduction and credit of any such partnership, limited
partnership or limited liability company, as applicable, such Grantor’s
interest in all distributions made or to be made by any such partnership,
limited partnership or limited liability company, as applicable, to such
Grantor and all of the other economic rights, titles and interests of such
Grantor as a partner or member, as applicable, of any such partnership, limited
partnership or limited liability company, as applicable, whether set forth in
the partnership agreement or membership agreement, as applicable, of such
partnership, limited partnership or limited liability company, as applicable,
by separate agreement or otherwise.


 


“Patents” means collectively, all of the following of any
Grantor: (a) all patents, rights and interests in patents, patentable
inventions and patent applications anywhere in the world, including, without
limitation, those listed on Schedule 3.11 hereto, (b) all reissues,
extensions, continuations (in whole or in part) and renewals of any of the
foregoing, (c) all income, royalties, damages or payments now or hereafter
due and/or payable under any of the foregoing or with respect to any of the
foregoing, including, without limitation, damages or payments for past or
future infringements of any of the foregoing, (d) the right to sue for
past, present and future infringements of any of the foregoing and (e) all
rights corresponding to any of the foregoing throughout the world.


 


“Patent License” means all agreements now or hereafter in
existence, whether written or oral, providing for the grant by or to any
Grantor of any right to manufacture, use or sell any invention covered in whole
or in part by a Patent, including, without limitation, any of the foregoing
referred to in Schedule 3.11 hereto.


 


“Perfection Certificate” means the perfection certificate
dated as of even date herewith, substantially in the form of Exhibit A
attached hereto, and otherwise in form and substance satisfactory to the
Collateral Agent, and duly certified by an officer, partner or member, as
applicable, of each Grantor.


 


“Permitted Liens” means Liens permitted pursuant to Section 6.02
of the Credit Agreement.


 


5

















 


“Securities Act” means the Securities Act of 1933, including
all amendments thereto and regulations promulgated thereunder.


 


“Security Interests” means the security interests granted
pursuant to Article 2, as well as all other security interests created or
assigned as additional security for the Obligations pursuant to the provisions
of the Credit Agreement.


 


“Subsidiary Issuer” means any Issuer of Investment Property
or any Partnership/LLC Interests, which is (i) a direct or indirect
Domestic Subsidiary of the Borrower or (ii) a direct first tier Foreign
Subsidiary of any Grantor.


 


“Trademarks” means collectively, all of the following of any
Grantor: (a) all trademarks, rights and interests in trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, other business identifiers, prints
and labels on which any of the foregoing have appeared or appear, all
registrations and recordings thereof, and all applications in connection
therewith anywhere in the world, including, without limitation, those listed on
Schedule 3.11 hereto, (b) all reissues, extensions, continuations (in
whole or in part) and renewals of any of the foregoing, (c) all income,
royalties, damages and payments now or hereafter due and/or payable under any
of the foregoing or with respect to any of the foregoing, including, without
limitation, damages or payments for past or future infringements of any of the
foregoing, (d) the right to sue for past, present and future infringements
of any of the foregoing and (e) all rights corresponding to any of the
foregoing throughout the world.


 


“Trademark License” means any agreement now or hereafter in
existence, whether written or oral, providing for the grant by or to any
Grantor of any right to use any Trademark, including, without limitation, any
of the foregoing referred to in Schedule 3.11.


 


“UCC” means the Uniform Commercial Code as in effect in the
State of New York, as amended or modified from time to time; provided that if perfection or the effect of perfection or
non-perfection or the priority of any Lien created hereunder on any Collateral
is governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, “UCC” means the Uniform Commercial Code as in effect from time
to time in such other jurisdiction for purposes of the provisions hereof
relating to such perfection, effect of perfection or non-perfection or
priority.


 


“Vehicles” means all cars, trucks, trailers, construction and
earth moving equipment and other vehicles covered by a certificate of title
under the laws of any state, all tires and all other appurtenances to any of
the foregoing.


 


6
















 


Section 1.03. Other
Definitional Provisions. Terms defined in the Credit Agreement and
not otherwise defined herein shall have the meaning assigned thereto in the
Credit Agreement. The words “hereof”, “herein”, “hereto” and “hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section and Schedule references are to this Agreement unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. Where the
context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to such Grantor’s Collateral or the
relevant part thereof.


 


ARTICLE 2

SECURITY INTEREST


 


Section 2.01. Grant of
Security Interest.


 


(a)                                  Each Grantor hereby
grants, pledges and collaterally assigns to the Collateral Agent, for the
ratable benefit of itself and the other Secured Parties, a security interest in
all of such Grantor’s right, title and interest in the following property now
owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or
interest, and wherever located or deemed located (collectively, the “Collateral”), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations:


 


	
  (i)

  	
   

  	
  all Accounts;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  all cash and currency;

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  all Chattel Paper;

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  all Commercial Tort Claims identified on Schedule 3.9;

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  all Deposit Accounts;

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  all Documents;

  
	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  all Equipment;

  
	
   

  	
   

  	
   

  
	
  (viii)

  	
   

  	
  all Fixtures;

  
	
   

  	
   

  	
   

  
	
  (ix)

  	
   

  	
  all General Intangibles;

  



 


7

















 


	
  (x)

  	
   

  	
  all Instruments;

  
	
   

  	
   

  	
   

  
	
  (xi)

  	
   

  	
  all Intellectual Property;

  
	
   

  	
   

  	
   

  
	
  (xii)

  	
   

  	
  all Inventory;

  
	
   

  	
   

  	
   

  
	
  (xiii)

  	
   

  	
  all Investment Property;

  
	
   

  	
   

  	
   

  
	
  (xiv)

  	
   

  	
  all Letter of Credit Rights;

  
	
   

  	
   

  	
   

  
	
  (xv)

  	
   

  	
  all Vehicles;

  
	
   

  	
   

  	
   

  
	
  (xvi)

  	
   

  	
  all other personal property not otherwise described above;

  
	
   

  	
   

  	
   

  
	
  (xvii)

  	
   

  	
  all books and records pertaining to the Collateral; and

  
	
   

  	
   

  	
   

  
	
  (xviii)

  	
   

  	
   to the extent not otherwise
  included, all Proceeds and products of any and all of the foregoing and all 

  
	
  collateral security and Supporting
  Obligations (as now or hereafter defined in the UCC) given by any Person with
  respect to any of the foregoing; 

  



 


provided,
however, that this Agreement shall not constitute a
grant of security interest in (and the term “Collateral” shall be deemed not to
include) (A) any United States intent-to-use trademark applications to the
extent that, and solely during the period in which, the grant of a security
interest therein would impair the validity or enforceability of such
intent-to-use trademark applications under applicable federal law and (B) more
than 66% of the issued and outstanding voting Equity Interests (within the
meaning of Section 956 of the Code), if any, of any Foreign Subsidiary.


 


(b)                                 Notwithstanding clause
(a) of this Section 2.01, the payment and performance of the
Obligations shall not be secured by any Financial Hedging Agreement between any
Grantor and an Arranger or a Lender or any Affiliate of an Arranger or a
Lender.


 


Section 2.02. Grantors
Remain Liable. Anything herein to the contrary notwithstanding: (a) each
Grantor shall remain liable under the contracts and agreements included in the
Collateral to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by the Collateral Agent of any of the rights
hereunder shall not release any Grantor from any of its duties or obligations
under the contracts and agreements included in the Collateral, (c) no
Secured Party shall have any obligation or liability under the contracts and
agreements included in the Collateral by reason of this Agreement, nor shall
any Secured Party be obligated to perform any of the obligations or duties of
any Grantor thereunder or to take any action to collect or enforce any claim
for payment


 


8

















 


assigned hereunder, and (d) no
Secured Party shall have any liability in contract or tort for any Grantor’s
acts or omissions.


 


ARTICLE 3

REPRESENTATIONS AND WARRANTIES


 


To induce the
Administrative Agent, the Collateral Agent and the Lenders to enter into the
Credit Agreement, to induce the Lenders to make their respective Loans to the
Borrower and the Issuing Bank to issue Letters of Credit thereunder and to
induce the entry into any Financial Hedging Agreement by the Secured Party
counterparty party thereto, each Grantor hereby represents and warrants to the
Collateral Agent and each other Secured Party that:


 


Section 3.01. Existence.
Each Grantor is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation,
has the requisite power and authority to own, lease and operate its properties
and to carry on its business as now being and hereafter proposed to be
conducted and is duly qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification and authorization other than in such
jurisdiction where failure to so qualify could not reasonably be expected to
have a Material Adverse Effect.


 


Section 3.02.
Authorization of Agreement; No Conflict. Each Grantor has the right,
power and authority and has taken all necessary corporate and other action to
authorize the execution, delivery and performance of this Agreement. This
Agreement has been duly executed and delivered by the duly authorized officers
of each Grantor and this Agreement constitutes the legal, valid and binding obligation
of the Grantors enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors’ rights in general and the
availability of equitable remedies. The execution, delivery and performance by
the Grantors of this Agreement will not, by the passage of time, the giving of
notice or otherwise, violate any material provision of any Applicable Law or
Material Contract and will not result in the creation or imposition of any
Lien, other than the Security Interests, upon or with respect to any property
or revenues of any Grantor.


 


Section 3.03. Consents. No
approval, consent, exemption, authorization or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by or
enforcement against any Grantor or any Subsidiary Issuer of this Agreement,
except (i) as may be required by laws affecting the offering and sale of
securities generally, (ii) filings with the United States Copyright Office


 


9

















 


and/or the United States Patent
and Trademark Office and (iii) filings under the UCC and/or the Assignment
of Claims Act.


 


Section 3.04. Perfected
First Priority Liens. Each financing statement naming any Grantor as
a debtor is in appropriate form for filing in the appropriate filing offices of
the states specified on Schedule 3.6. The Security Interests granted pursuant
to this Agreement (a) constitute valid perfected security interests in all
of the Collateral in favor of the Collateral Agent, for the ratable benefit of
itself and the other Secured Parties, as collateral security for the
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral
in existence on the date hereof except for Permitted Liens.


 


Section 3.05. Title; No
Other Liens. Except for the Security Interests, each Grantor owns
each item of the Collateral free and clear of any and all Liens or claims other
than Permitted Liens. No financing statement under the UCC of any state which
names a Grantor as debtor or other public notice with respect to all or any
part of the Collateral is on file or of record in any public office, except such
as have been filed in favor of the Collateral Agent, for the ratable benefit of
itself and the other Secured Parties, pursuant to this Agreement or in
connection with Permitted Liens. No Collateral is in the possession or Control
of any Person asserting any claim thereto or security interest therein, except
that (a) the Collateral Agent or its designee may have possession or
Control of Collateral as contemplated hereby, (b) a depositary bank may
have Control of a Deposit Account owned by a Grantor at such depositary bank
and a Securities Intermediary may have Control over a Securities Account owned
by a Grantor at such Securities Intermediary, in each case subject to the terms
of any Deposit Account control agreement or Securities Account control
agreement, as applicable and to the extent required by Section 4, in favor
of the Collateral Agent, and (c) a bailee, consignee or other Person may
have possession of the Collateral as contemplated by, and so long as, the
applicable Grantors have complied to the satisfaction of the Collateral Agent
with the applicable provisions of Section 4.


 


Section 3.06. State of
Organization; Location of Inventory; Equipment and Fixtures; Other Information.


 


(a)                                  The exact legal name
of each Grantor is set forth on Schedule 3.6.


 


(b)                                 Each Grantor is a
Registered Organization organized under the laws of the state identified on
Schedule 3.6 under such Grantor’s name. The taxpayer identification number and
Registered Organization number of each Grantor is set forth on Schedule 3.6
under such Grantor’s name.


 


10

















 


(c)                                  All Collateral
consisting of Inventory or Equipment (other than Inventory and Equipment held
on marine vessels or leased in the ordinary course of business, in transit, or
Equipment temporarily moved to another location for repair or refurbishment)
and Fixtures (whether now owned or hereafter acquired) is (or will be) located
at the locations specified on Schedule 3.6, except as otherwise permitted
hereunder or under the Credit Agreement.


 


(d)                                 The mailing address,
chief place of business, chief executive office and office where each Grantor
keeps its books and records relating to the Accounts, Documents, General
Intangibles, Instruments and Investment Property in which it has any interest
is located at the locations specified on Schedule 3.6 under such Grantor’s
name. No Grantor has any other places of business except those separately set
forth on Schedule 3.6 under such Grantor’s name. No Grantor does business nor
has done business during the past five years under any trade name or fictitious
business name except as disclosed on Schedule 3.6 under such Grantor’s name.
Except as disclosed on Schedule 3.6 under such Grantor’s name, no Grantor has
acquired assets from any Person, other than assets acquired in the ordinary
course of such Grantor’s business, during the past five years.


 


Section 3.07. Accounts. Each
existing Account constitutes, and each hereafter arising Account will
constitute, the legally valid and binding obligation of the applicable Account
Debtor. The amount represented by each Grantor to the Collateral Agent as owing
by each Account Debtor is, or will be, the correct amount actually and
unconditionally owing, except for normal cash discounts and allowances where
applicable. No Account Debtor has any defense, setoff, claim or counterclaim
against any Grantor that can be asserted against the Collateral Agent, whether
in any proceeding to enforce the Collateral Agent’s rights in the Collateral or
otherwise except defenses, setoffs, claims or counterclaims that are not, in
the aggregate, material to the value of the Accounts. None of the Accounts is,
nor will any hereafter arising Account be, evidenced by a promissory note or
other Instrument, other than a check, that has not been pledged to the
Collateral Agent in accordance with the terms hereof.


 


Section 3.08. Chattel
Paper. As of the date hereof, no Grantor holds any Chattel Paper in
the ordinary course of its business.


 


Section 3.09. Commercial
Tort Claims. As of the date hereof, all Commercial Tort Claims owned
by any Grantor and where the reasonably expected amount to be recovered from
such claim exceeds $500,000 are listed on Schedule 3.9.


 


Section 3.10. Deposit
Accounts. As of the date hereof, all Deposit Accounts (including, without
limitation, cash management accounts that are Deposit Accounts) owned by any
Grantor are listed on Schedule 3.10.


 


11

















 


Section 3.11.
Intellectual Property.


 


(a)                                  All United States
Copyright registrations, Copyright applications, issued Patents, Trademark
registrations, Trademark applications and domain names owned by any Grantor in
its own name on the date hereof is listed on Schedule 3.11.


 


(b)                                 Except as set forth in
Schedule 3.11 on the date hereof, none of the Intellectual Property owned by
any Grantor is the subject of any written licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor, except as could
not reasonably be expected to have a Material Adverse Effect.


 


Section 3.12. Inventory.
Collateral consisting of Inventory is of good and merchantable
quality, free from any material defects. To the knowledge of each Grantor, none
of such Inventory is subject to any licensing, Patent, Trademark, trade name or
Copyright with any Person that restricts any Grantor’s ability to manufacture
and/or sell such Inventory. The completion of the manufacturing process of such
Inventory by a Person other than the applicable Grantor would be permitted
under any contract to which such Grantor is a party or to which the Inventory
is subject.


 


Section 3.13. Investment
Property; Partnership/LLC Interests.


 


(a)                                  As of the date
hereof, all Investment Property (including, without limitation, Securities
Accounts and cash management accounts that are Investment Property) and all
Partnership/LLC Interests owned by any Grantor is listed on Schedule 3.13.


 


(b)                                 All Investment
Property and all Partnership/LLC Interests issued by any Subsidiary Issuer to
any Grantor (i) have been duly and validly issued and, if applicable, are
fully paid and nonassessable, (ii) are beneficially owned as of record by
such Grantor and (ii) constitute all the issued and outstanding shares of
all classes of the capital stock or equity interest of such Subsidiary Issuer issued
to such Grantor.


 


(c)                                  None of the
Partnership/LLC Interests (i) are traded on a Securities exchange or in
Securities markets, (ii) by their terms expressly provide that they are
Securities governed by Article 8 of the UCC or (iii) are Investment
Company Securities.


 


Section 3.14.
Instruments. As of the date hereof, no Grantor holds any Instruments
or is named a payee of any promissory note or other evidence of indebtedness,
other than the notes listed on Schedule 3.14.


 


12

















 


Section 3.15.
Representations in Credit Agreement. In the case of each Grantor
(other than the Borrower), the representations and warranties set forth in Article 3
of the Credit Agreement as they relate to such Grantor or to any Loan Document
to which such Grantor is a party are true and correct on and as of the date
hereof (or, in the case of any Additional Grantor, on and as of the date such
Person becomes a party hereto), except to the extent such representations and
warranties expressly relate to an earlier date.


 


ARTICLE 4

COVENANTS


 


Until the
Obligations shall have been paid in full and the Commitments terminated, unless
consent has been obtained in the manner provided for in Section 7.01, each
Grantor covenants and agrees that:


 


Section 4.01.
Maintenance of Perfected Security Interest; Further Information.


 


(a)                                  Each Grantor shall
maintain the Security Interest created by this Agreement as a perfected
Security Interest having at least the priority described in Section 3.04
and shall defend such Security Interest against the claims and demands of all
Persons whomsoever.


 


(b)                                 Each Grantor will
furnish to the Collateral Agent and the other Secured Parties from time to time
statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Collateral Agent may reasonably request, all in reasonable detail.


 


Section 4.02.
Maintenance of Insurance. Each Grantor will maintain, with
financially sound and reputable companies, insurance policies in accordance
with Section 5.06 of the Credit Agreement.


 


Section 4.03. Changes in
Locations; Changes in Name or Structure. No Grantor will, except
upon 15 days’ prior written notice to the Collateral Agent and delivery to the
Collateral Agent of (a) all additional financing statements (executed if
necessary for any particular filing jurisdiction) and other instruments and
documents reasonably requested by the Collateral Agent to maintain the
validity, perfection and priority of the Security Interests and (b) if
applicable, a written supplement to the Schedules of this Agreement:


 


(i)             permit
any Deposit Account to be held by or at a depositary bank other than the
depositary bank that held such Deposit Account as of the date hereof as set
forth on Schedule 3.10;


 


13

















 


(ii)          permit
any of the Inventory or Equipment (other than Inventory and Equipment held on
marine vessels or leased in the ordinary course of business, in transit, or
Equipment temporarily moved to another location for repair or refurbishment)
and Fixtures (whether now owned or hereafter acquired) to be kept at a location
other than those listed on Schedule 3.6, except as otherwise permitted
hereunder or under the Credit Agreement;


 


(iii)       permit
any Investment Property (other than Certificated Securities delivered to the
Collateral Agent pursuant to Section 4.05) to be held by a Securities
Intermediary other than the Securities Intermediary that held such Investment
Property as of the date hereof as set forth on Schedule 3.13;


 


(iv)      change
its jurisdiction of organization or the location of its chief executive office
from that identified on Schedule 3.6; or


 


(v)         change
its name, identity or corporate or organizational structure to such an extent
that any financing statement filed by the Collateral Agent in connection with
this Agreement would become misleading.


 


Section 4.04. Required
Notifications. Each Grantor shall promptly notify the Collateral
Agent, in writing, of: (a) any Lien (other than the Security Interests or
Permitted Liens) on any of the Collateral which would adversely affect the
ability of the Collateral Agent to exercise any of its remedies hereunder, (b) the
occurrence of any other event which could reasonably be expected to have a Material
Adverse Effect on the aggregate value of the Collateral or on the Security
Interests, (c) any Collateral which, to the knowledge of such Grantor,
constitutes a Government Contract, and (d) the acquisition or ownership by
such Grantor of any (i) Commercial Tort Claim where the reasonably
expected amount to be recovered from such claim exceeds $500,000, (ii) Deposit
Account, or (iii) Investment Property after the date hereof.


 


Section 4.05. Delivery
Covenants. Each Grantor will deliver and pledge to the Collateral
Agent, for the ratable benefit of itself and the other Secured Parties, to the
extent such items constitute Collateral, all Certificated Securities,
Partnership/LLC Interests evidenced by a certificate, negotiable Documents with
respect to any Collateral which exceeds $500,000 in value, Instruments, and
Tangible Chattel Paper owned or held by such Grantor, in each case, together
with an Effective Endorsement and Assignment and all Supporting Obligations, as
applicable, unless such delivery and pledge has been waived in writing by the
Collateral Agent.


 


14

















 


Section 4.06. Control
Covenants.


 


(a)                                  Each Grantor shall
instruct (and otherwise use its reasonable efforts to cause) (i) each
depositary bank (other than the Collateral Agent) holding a Deposit Account
owned by such Grantor and (ii) each Securities Intermediary holding any
Investment Property owned by such Grantor, to execute and deliver a control
agreement, sufficient to provide the Collateral Agent with Control of such
Deposit Account or Investment Property, and otherwise in form and substance
satisfactory to the Collateral Agent (any such depositary bank executing and
delivering any such control agreement, a “Controlled Depositary”,
and any such Securities Intermediary executing and delivering any such control
agreement, a “Controlled Intermediary”). In the
event any such depositary bank or Securities Intermediary refuses to execute
and deliver such control agreement, the Collateral Agent, in its sole
discretion, may require the applicable Deposit Account and Investment Property
to be transferred to the Collateral Agent or a Controlled Depositary or
Controlled Intermediary, as applicable.


 


(b)                                 Each Grantor will take
such actions and deliver all such agreements as are requested by the Collateral
Agent to provide the Collateral Agent with Control of all Letter of Credit
Rights and Electronic Chattel Paper owned or held by such Grantor, including,
without limitation, with respect to any such Electronic Chattel Paper, by
having the Collateral Agent identified as the assignee of the Record(s) pertaining
to the single authoritative copy thereof.


 


(c)                                  If any Collateral
(other than Collateral specifically subject to the provisions of Section 4.06(a) and
Section 4.06(b)) exceeding in value $500,000 in the aggregate (such
Collateral exceeding such amount, the “Excess Collateral”)
is at any time in the possession or control of any consignee, warehouseman,
bailee (other than a carrier transporting Inventory to a purchaser in the
ordinary course of business), processor, or any other third party, such Grantor
shall promptly notify the Collateral Agent thereof and, upon request of the
Collateral Agent, notify in writing such Person of the Security Interests
created hereby, shall use its reasonable efforts to obtain such Person’s
agreement in writing to hold all such Collateral for the Collateral Agent’s
account subject to the Collateral Agent’s instructions, and shall use its
reasonable efforts to cause such Person to issue and deliver to the Collateral
Agent warehouse receipts, bills of lading or any similar documents relating to
such Collateral together with an Effective Endorsement and Assignment; provided that if such Grantor is not able to obtain such
agreement and cause the delivery of such items, the Collateral Agent, in its
sole discretion, may require such Excess Collateral to be moved to another
location specified thereby. Further, each Grantor shall perfect and protect such
Grantor’s ownership interests in all Inventory stored with a consignee against
creditors of the consignee by filing and maintaining financing statements
against the consignee reflecting the consignment arrangement filed in all
appropriate filing offices, providing any written notices required to notify
any prior creditors of the


 


15

















 


consignee of the consignment
arrangement, and taking such other actions as may be appropriate to perfect and
protect such Grantor’s interests in such inventory under Section 2-326, Section 9-103,
Section 9-324 and Section 9-505 of the UCC or otherwise. All such
financing statements filed pursuant to this Section 4.06(c) shall be
assigned, on the face thereof, to the Collateral Agent, for the ratable benefit
of itself and the other Secured Parties.


 


Section 4.07. Filing
Covenants. Pursuant to Section 9-509 of the UCC and any other
Applicable Law, each Grantor authorizes the Collateral Agent to file or record
financing statements and other filing or recording documents or instruments
with respect to the Collateral without the signature of such Grantor in such
form and in such offices as the Collateral Agent determines appropriate to
perfect the Security Interests of the Collateral Agent under this Agreement.
Such financing statements may describe the Collateral in the same manner as
described herein or may contain an indication or description of Collateral that
describes such property in any other manner as the Collateral Agent may determine,
in its sole discretion, is necessary, advisable or prudent to ensure the
perfection of the Security Interest in the Collateral granted herein,
including, without limitation, describing such property as “all assets” or “all
personal property”. Further, a photographic or other reproduction of this
Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any jurisdiction.
Grantor hereby authorizes, ratifies and confirms all financing statements and
other filing or recording documents or instruments filed by Collateral Agent
prior to the date of this Agreement.


 


Section 4.08. Accounts.


 


(a)                                  Other than in the
ordinary course of business consistent with prudent business practice, no
Grantor will (i) grant any extension of the time of payment of any
Account, (ii) compromise or settle any Account for less than the full
amount thereof, (iii) release, wholly or partially, any Account Debtor, (iv) allow
any credit or discount whatsoever on any Account or (v) amend, supplement
or modify any Account, in each case with respect to the foregoing clauses (i) through
(v) in any manner that could reasonably be expected to adversely affect
the value thereof.


 


(b)                                 Each Grantor will
deliver to the Collateral Agent a copy of each material demand, notice or
document received by it that questions or calls into doubt the validity or
enforceability of any material Account.


 


(c)                                  The Collateral Agent
shall have the right to make test verifications of the Accounts in any manner
and through any medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the Collateral Agent may
require in connection with such test verifications. At any time and from time
to time, upon the Collateral Agent’s


 


16

















 


reasonable request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to
the Collateral Agent to furnish to the Collateral Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Accounts.


 


Section 4.09.
Intellectual Property.


 


(a)                                  Except as could not
reasonably be expected to have a Material Adverse Effect, each Grantor (either
itself or through licensees) (i) will continue to use each registered
Trademark (owned by such Grantor) and Trademark for which an application (owned
by such Grantor) is pending, to the extent reasonably necessary to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii) will
maintain products and services offered under such Trademark at a level
substantially consistent with the quality of such products and services as of
the date hereof, (iii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark could reasonably be expected to become invalidated or impaired in any
way, (iv) will not do any act, or knowingly omit to do any act, whereby
any issued Patent owned by such Grantor would reasonably be expected to become
forfeited, abandoned or dedicated to the public, (v) will not (and will
not permit any licensee or sublicensee thereof to) do any act or knowingly omit
to do any act whereby any registered Copyright owned by such Grantor or
Copyright for which an application is pending (owned by such Grantor) could
reasonably be expected to become invalidated or otherwise impaired and (vi) will
not (either itself or through licensees) do any act whereby any material
portion of the Copyrights may fall into the public domain.


 


(b)                                 Each Grantor will
notify the Collateral Agent promptly if it knows, or has reason to know, that
any application or registration relating to any material Intellectual Property
owned by such Grantor may become forfeited, abandoned or dedicated to the
public, or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor’s ownership of, or the validity of, any material Intellectual Property
owned by such Grantor or such Grantor’s right to register the same or to own
and maintain the same.


 


(c)                                  Whenever such
Grantor, either by itself or through any agent, employee, licensee or designee,
shall file an application for the registration of any Intellectual Property
with the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency in any other country or any political
subdivision thereof, such Grantor shall report such filing to the Collateral
Agent within five (5) Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon request of the Collateral Agent,


 


17

















 


such Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Collateral Agent may
reasonably request to evidence the Secured Parties’ security interest in any
material Copyright, Patent or Trademark and the goodwill and General
Intangibles of such Grantor relating thereto or represented thereby.


 


(d)                                 Each Grantor will take
all reasonable and necessary steps, at such Grantor’s sole cost and expense,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any similar
office or agency in any other country or any political subdivision thereof, to
maintain and pursue each application (and to obtain the relevant registration)
and to maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.


 


(e)                                  In the event that any
material Intellectual Property owned by a Grantor is infringed, misappropriated
or diluted by a third party, the applicable Grantor shall (i) at such
Grantor’s sole cost and expense, take such actions as such Grantor shall
reasonably deem appropriate under the circumstances to protect such
Intellectual Property and (ii) if such Intellectual Property is of
material economic value, promptly notify the Collateral Agent after it learns
of such infringement, misappropriation or dilution.


 


Section 4.10. Investment
Property; Partnership/LLC Interests.


 


(a)                                  Without the prior
written consent of the Collateral Agent, no Grantor will (i) vote to
enable, or take any other action to permit, any Subsidiary Issuer to issue any
Investment Property or Partnership/LLC Interests, except for such additional
Investment Property or Partnership/LLC Interests that will be subject to the
Security Interest granted herein in favor of the Collateral Agent to the extent
required herein, or (ii) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Collateral Agent to
sell, assign or transfer any Investment Property or Partnership/LLC Interests
or Proceeds thereof. The Grantors will defend the right, title and interest of
the Collateral Agent in and to any Investment Property and Partnership/LLC
Interests against the claims and demands of all Persons whomsoever.


 


(b)                                 If any Grantor shall
become entitled to receive or shall receive (i) any Certificated
Securities (including, without limitation, any certificate representing a stock
dividend or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights in respect of the ownership interests of any
Issuer, whether in addition to, in substitution of, as a conversion of, or in
exchange for, any Investment Property, or otherwise in respect thereof, or (ii) any
sums paid upon or in respect of any Investment Property upon the


 


18

















 


liquidation or dissolution of any Issuer, such Grantor shall accept the
same as the agent of the Secured Parties, hold the same in trust for the
Secured Parties, segregated from other funds of such Grantor, and promptly
deliver the same to the Collateral Agent in accordance with the terms hereof.


 


Section 4.11. Equipment.
Each Grantor will maintain each material item of Equipment in good
working order and condition (reasonable wear and tear and obsolescence
excepted), and in accordance in all material respects with any manufacturer’s
manual, and will timely provide all maintenance, service and repairs reasonably
necessary for such purpose and will promptly furnish to the Collateral Agent a
statement respecting any material loss or damage to any of the Equipment.


 


Section 4.12. Vehicles. Upon
the request of the Collateral Agent upon the occurrence and during the
continuance of an Event of Default, all applications for certificates of title
or ownership indicating the Collateral Agent’s first priority Lien on the
Vehicle covered by such certificate, and any other necessary documentation,
shall be filed in each office in each jurisdiction which the Collateral Agent
shall deem reasonably advisable to perfect its Liens on the Vehicles. Prior
thereto, each certificate of title or ownership relating to each Vehicle shall
be maintained by the applicable Grantor in accordance with Applicable Law to
reflect the ownership interest of such Grantor.


 


Section 4.13. Further
Assurances. Upon the request of the Collateral Agent and at the sole
expense of the Grantors, each Grantor will promptly and duly execute and
deliver, and have recorded, such further instruments and documents and take
such further actions as the Collateral Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including, without limitation, (i) the
collateral assignment of any Material Contract, (ii) with respect to
Government Contracts, collateral assignment agreements and notices of
collateral assignment, in form and substance satisfactory to the Collateral
Agent, duly executed by any Grantors party to such Government Contract in
compliance with the Assignment of Claims Act (or analogous state Applicable
Law), and (iii) all applications, certificates, instruments, registration
statements, and all other documents and papers the Collateral Agent may
reasonably request and as may be required by law in connection with the
obtaining of any consent, approval, registration, qualification, or
authorization of any Person deemed necessary or appropriate for the effective
exercise of any rights under this Agreement.


 


19

















 


ARTICLE 5

REMEDIAL PROVISIONS


 


Section 5.01. General
Remedies. If an Event of Default shall occur and be continuing, the
Collateral Agent, on behalf of the Secured Parties, may exercise, in addition
to all other rights and remedies granted to them in this Agreement and in any
other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the UCC or any
other Applicable Law. Without limiting the generality of the foregoing, the
Collateral Agent, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon any Grantor or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Collateral Agent or any other Secured Party or elsewhere
upon such terms and conditions as it may deem advisable and at such prices as
it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Collateral Agent may disclaim any warranties
of title, possession and quiet enjoyment. The Collateral Agent or any other
Secured Party shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and released.
Each Grantor further agrees, at the Collateral Agent’s request, to assemble the
Collateral and make it available to the Collateral Agent at places which the
Collateral Agent shall reasonably select, whether at such Grantor’s premises or
elsewhere. To the extent permitted by Applicable Law, each Grantor waives all
claims, damages and demands it may acquire against the Collateral Agent or any
other Secured Party arising out of the exercise by them of any rights hereunder
except to the extent any such claims, damages, or demands result solely from
the gross negligence or willful misconduct of the Collateral Agent or any other
Secured Party, in each case against whom such claim is asserted. If any notice
of a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least ten (10) days
before such sale or other disposition.


 


20
















 


Section 5.02. Specific
Remedies.


 


(a)                                  Reserved.


 


(b)                                 Upon
the occurrence and during the continuance of an Event of Default:


 


(i)             the Collateral Agent
may communicate with Account Debtors of any Account subject to a Security
Interest and upon the request of the Collateral Agent, each Grantor shall
notify (such notice to be in form and substance satisfactory to the Collateral
Agent) its Account Debtors and parties to the Material Contracts subject to a
Security Interest that such Accounts and the Material Contracts have been
assigned to the Collateral Agent, for the ratable benefit of itself and the
other Secured Parties;


 


(ii)          each Grantor shall
forward to the Collateral Agent, on the last Business Day of each week, deposit
slips related to all cash, money, checks or any other similar items of payment
received by the Grantor during such week, and, if requested by the Collateral
Agent, copies of such checks or any other similar items of payment, together
with a statement showing the application of all payments on the Collateral
during such week and a collection report with regard thereto, in form and
substance satisfactory to the Collateral Agent.


 


(iii)       whenever any Grantor shall
receive any cash, money, checks or any other similar items of payment relating
to any Collateral (including any Proceeds of any Collateral), such Grantor
agrees that it will, within one (1) Business Day of such receipt, deposit
all such items of payment into the Collateral Account or in a Deposit Account
at a Controlled Depositary and until such Grantor shall deposit such cash,
money, checks or any other similar items of payment in the Collateral Account
or in a Deposit Account at a Controlled Depositary, such Grantor shall hold
such cash, money, checks or any other similar items of payment in trust for the
Collateral Agent and the other Secured Parties and as property of the
Collateral Agent and the other Secured Parties, separate from the other funds
of such Grantor, and the Collateral Agent shall have the right to transfer or
direct the transfer of the balance of each Deposit Account to the Collateral
Account. All such Collateral and Proceeds of Collateral received by the
Collateral Agent hereunder shall be held by the Collateral Agent in the
Collateral Account as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 5.04.


 


(iv)      the Collateral Agent shall
have the right to receive any and all cash dividends, payments or distributions
made in respect of any Investment Property or Partnership/LLC Interests or
other Proceeds paid in respect of any Investment Property or Partnership/LLC
Interests, and any or all of any Investment Property or Partnership/LLC
Interests shall be 


 


21

















 


registered in the name of the Collateral
Agent or its nominee, and the Collateral Agent or its nominee may thereafter
exercise (A) all voting, corporate and other rights pertaining to such
Investment Property or Partnership/LLC Interests at any meeting of
shareholders, partners or members of the relevant Issuers and (B) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Investment Property or Partnership/LLC
Interests as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property or Partnership/LLC Interests upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate, partnership or company structure of any Issuer or upon the
exercise by any Grantor or the Collateral Agent of any right, privilege or
option pertaining to such Investment Property or Partnership/LLC Interests, and
in connection therewith, the right to deposit and deliver any and all of the
Investment Property or Partnership/LLC Interests with any committee,
depositary, transfer agent, registrar or other designated agency upon such
terms and conditions as the Collateral Agent may determine), all without
liability except to account for property actually received by it; but the
Collateral Agent shall have no duty to any Grantor to exercise any such right,
privilege or option and the Collateral Agent and the other Secured Parties shall
not be responsible for any failure to do so or delay in so doing. In
furtherance thereof, each Grantor hereby authorizes and instructs each Issuer
with respect to any Collateral consisting of Investment Property and
Partnership/LLC Interests to (i) comply with any instruction received by
it from the Collateral Agent in writing that (A) states that an Event of
Default has occurred and is continuing and (B) is otherwise in accordance
with the terms of this Agreement, without any other or further instructions
from such Grantor, and each Grantor agrees that each Issuer shall be fully
protected in so complying, and (ii) except as otherwise expressly
permitted hereby, pay any dividends, distributions or other payments with
respect to any Investment Property or Partnership/LLC Interests directly to the
Collateral Agent; and


 


(v)         the Collateral Agent
shall be entitled to (but shall not be required to):  (A) proceed to perform any and all
obligations of the applicable Grantor under any Material Contract and exercise all
rights of such Grantor thereunder as fully as such Grantor itself could, (B) do
all other acts which the Collateral Agent may deem necessary or proper to
protect its Security Interest granted hereunder, provided
such acts are not inconsistent with or in violation of the terms of any of the
Credit Agreement, of the other Loan Documents or Applicable Law, and (C) sell,
assign or otherwise transfer any Material Contract in accordance with the
Credit Agreement, the other Loan Documents and Applicable Law,


 


22

















 


subject, however, to the prior approval of
each other party to such Material Contract, to the extent required under such
Material Contract


 


(c)                                  Unless
an Event of Default shall have occurred and be continuing and the Collateral
Agent shall have given notice to the relevant Grantor of the Collateral Agent’s
intent to exercise its corresponding rights pursuant to Section 5.02(b),
each Grantor shall be permitted to receive all cash dividends, payments or other
distributions made in respect of any Investment Property and Partnership/LLC
Interests, in each case paid in the normal course of business of the relevant
Issuer and consistent with past practice, to the extent permitted in the Credit
Agreement, and to exercise all voting and other corporate, company and
partnership rights with respect to any Investment Property and Partnership/LLC
Interests; provided that, no vote shall be cast or
other corporate, company and partnership right exercised or other action taken
which, in the Collateral Agent’s reasonable judgment, would impair the
Collateral or which would result in a Default or Event of Default under any
provision of the Credit Agreement, this Agreement or any other Loan Document.


 


Section 5.03. Private Sale. Each
Grantor recognizes that the Collateral Agent may be unable to effect a public
sale of Collateral constituting Securities, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Each Grantor acknowledges
and agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Collateral Agent shall be under
no obligation to delay a sale of any such Securities for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so. Each Grantor agrees to use its best
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of such Securities valid and
binding and in compliance with any and all other Applicable Laws.


 


Section 5.04. Application of Proceeds.
At such intervals as may be agreed upon by the Borrower and the
Collateral Agent, or, if an Event of Default shall have occurred and be
continuing, at any time at the Collateral Agent’s election, the Collateral
Agent shall apply all or any part of the Collateral or any Proceeds of the
Collateral in payment in whole or in part of the Obligations (after deducting
all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any of the Collateral or
in any


 


23

















 


way relating
to the Collateral or the rights of the Collateral Agent and the other Secured
Parties hereunder) as follows:


 


first,                                  to
pay the expenses of any sale or other disposition, including reasonable
compensation to agents of and counsel for the Administrative Agent and the
Collateral Agent, and all expenses, liabilities and advances incurred or made
by the Administrative Agent and the Collateral Agent in connection with the
Security Documents, and any other amounts then due and payable to the
Administrative Agent and the Collateral Agent pursuant to Section 7.04 or
pursuant to Section 9.05 of the Credit Agreement;


 


second,                 to
pay ratably all interest (including interest accruing after the filing of any
bankruptcy or similar petition (or that would accrue but for the operation of
applicable bankruptcy or insolvency laws), regardless of whether allowed or
allowable in such proceeding) and fees on the Obligations, until payment in
full of all such interest and fees shall have been made;


 


third,                            to
pay the unpaid principal of the Obligations (including, in the case of any
Financial Hedging Obligations, any termination payments) ratably, until payment
in full of the principal of all Obligations shall have been made;


 


fourth,                      to
pay all other Obligations and Cash Management Obligations ratably, until
payment in full of all such other Obligations and Cash Management Obligations
shall have been made; and


 


finally,                    to
pay to the relevant Grantor, or as a court of competent jurisdiction may
direct, any surplus then remaining from the proceeds of the Collateral owned by
it.


 


Only after (i) the
payment by the Collateral Agent of any other amount required by any provision
of law, including, without limitation, Section 9-610 and Section 9-615
of the UCC and (ii) the payment in full of the Obligations and the
termination of the Commitments, shall the Collateral Agent account for the
surplus, if any, to any Grantor, or to whomever may be lawfully entitled to
receive the same (if such Person is not a Grantor).


 


Section 5.05. Waiver; Deficiency. Each
Grantor hereby waives, to the extent permitted by Applicable Law, all rights of
redemption, appraisement, valuation, stay, extension or moratorium now or
hereafter in force under any Applicable Law in order to prevent or delay the
enforcement of this Agreement or the absolute sale of the Collateral or any
portion thereof. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of


 


24

















 


the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Collateral Agent or any other Secured Party to
collect such deficiency.


 


ARTICLE 6

THE COLLATERAL AGENT


 


Section 6.01. Collateral Agent’s
Appointment as Attorney-in-fact.


 


(a)                                  Each
Grantor hereby irrevocably constitutes and appoints the Collateral Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following upon the occurrence and continuation of an Event of Default:


 


(i)             in the name of such
Grantor or its own name, or otherwise, take possession of and indorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Account or Material Contract subject to a
Security Interest or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Collateral Agent for the purpose of collecting any
and all such moneys due under any Account or Material Contract subject to a
Security Interest or with respect to any other Collateral whenever payable;


 


(ii)          in the case of any
Intellectual Property, execute and deliver, and have recorded, any and all
agreements, instruments, documents and papers as the Collateral Agent may
request to evidence the Secured Parties’ Security Interest in such Intellectual
Property and the goodwill and General Intangibles of such Grantor relating
thereto or represented thereby;


 


(iii)       pay or discharge taxes and
Liens levied or placed on or threatened against the Collateral, effect any
repairs or any insurance called for by the terms of this Agreement and pay all
or any part of the premiums therefor and the costs thereof;


 


25

















 


(iv)      execute, in connection with
any sale provided for in this Agreement, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral; and


 


(v)         (A) direct any party
liable for any payment under any of the Collateral to make payment of any and
all moneys due or to become due thereunder directly to the Collateral Agent or
as the Collateral Agent shall direct; (B) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any
Collateral; (C) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (D) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (E) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (F) settle,
compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Collateral Agent may deem
appropriate; (G) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), for such term or terms, on such conditions, and in such manner, as
the Collateral Agent shall in its sole discretion determine; and (H) generally,
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Collateral
Agent were the absolute owner thereof for all purposes, and do, at the
Collateral Agent’s option and such Grantor’s expense, at any time, or from time
to time, all acts and things which the Collateral Agent deems necessary to
protect, preserve or realize upon the Collateral and the Secured Parties’
Security Interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.


 


(b)                                 If
any Grantor fails to perform or comply with any of its agreements contained
herein, the Collateral Agent, at its option, but without any obligation so to
do, may perform or comply, or otherwise cause performance or compliance, with
such agreement in accordance with the provisions of Section 6.01(a).


 


(c)                                  The
expenses of the Collateral Agent incurred in connection with actions taken
pursuant to the terms of this Agreement, together with interest thereon at a
rate per annum equal to the highest rate per annum at which interest would then
be payable on any category of past due ABR Loans under the Credit Agreement,
from the date of payment by the Collateral Agent to the date reimbursed by the
relevant Grantor, shall be payable by such Grantor to the Collateral Agent on
demand.


 


26

















 


(d)                                 Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof in accordance with Section 6.01(a). All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the
Security Interests created hereby are released.


 


Section 6.02. Duty of Collateral Agent.
The Collateral Agent’s sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession,
under Section 9-207 of the UCC or otherwise, shall be to deal with it in
the same manner as the Collateral Agent deals with similar property for its own
account. Neither the Collateral Agent, any other Secured Party nor any of their
respective officers, directors, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Collateral Agent and the other Secured Parties
hereunder are solely to protect the Secured Parties’ interests in the
Collateral and shall not impose any duty upon the Collateral Agent or any other
Secured Party to exercise any such powers. The Collateral Agent and the other Secured
Parties shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor
for any act or failure to act hereunder, except for their own gross negligence
or willful misconduct.


 


Section 6.03. Authority of Collateral
Agent. Each Grantor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect to
any action taken by the Collateral Agent or the exercise or non exercise by the
Collateral Agent of any option, voting right, request, judgment or other right
or remedy provided for herein or resulting or arising out of this Agreement
shall, as between the Collateral Agent and the other Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Grantors, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement to make any inquiry respecting such authority.


 


ARTICLE 7

MISCELLANEOUS


 


Section 7.01. Amendments in Writing. None
of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except in accordance with Section 9.08
of the Credit Agreement.


 


27

















 


Section 7.02. Notices. All
notices, requests and demands to or upon the Collateral Agent or any Grantor
hereunder shall be effected in the manner provided for in Section 9.01 of
the Credit Agreement.


 


Section 7.03. No Waiver by Course of
Conduct; Cumulative Remedies. Neither the Collateral Agent nor any
other Secured Party shall by any act (except by a written instrument pursuant
to Section 7.01), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default. No failure to exercise, nor any delay in exercising on the
part of the Collateral Agent or any other Secured Party, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Collateral Agent or any other Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Collateral Agent or such other Secured Party would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.


 


Section 7.04. Enforcement Expenses;
Indemnification.


 


(a)                                  Each
Grantor agrees to pay or reimburse the Collateral Agent and each other Secured
Party for all its costs and expenses incurred in connection with enforcing or
preserving any rights under this Agreement and the other Loan Documents to
which such Grantor is a party (including, without limitation, in connection
with any workout, restructuring, bankruptcy or other similar proceeding),
including, without limitation, the reasonable fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to the
Collateral Agent and of counsel to each other Secured Party.


 


(b)                                 Each
Grantor agrees to pay, and to save the Collateral Agent and the other Secured
Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which
may be payable or determined to be payable with respect to any of the
Collateral or in connection with any of the transactions contemplated by this
Agreement.


 


(c)                                  Each
Grantor agrees to pay, and to save the Collateral Agent and the other Secured
Parties harmless from any and all liabilities, obligations, losses, damages,
penalties, costs and expenses in connection with actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to Section 9.05
of the Credit Agreement.


 


28
















 


(d)           The
agreements in this Section 7.04 shall survive termination of the Commitments
and repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.


 


Section 7.05. Waiver of
Jury Trial; Preservation of Remedies.


 


(a)           Waiver of Jury Trial.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
COLLATERAL AGENT, EACH LENDER, EACH OTHER SECURED PARTY (BY VIRTUE OF ACCEPTING
THE BENEFITS OF THIS AGREEMENT) AND EACH GRANTOR HEREBY IRREVOCABLY WAIVES
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR
OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, ANY NOTES ISSUED PURSUANT TO THE CREDIT AGREEMENT,
ANY  RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.


 


(b)           Preservation of Certain
Remedies. The parties hereto and to the other Loan Documents and any
Financial Hedging Agreement preserve, without diminution, certain remedies that
such Persons may employ or exercise freely, either alone, in conjunction with
or during a Dispute. Each such Person shall have and hereby reserves the right
to proceed in any court of proper jurisdiction or by self help to exercise or
prosecute the following remedies, as applicable:  (i) all rights to foreclose against any
real or personal property or other security by exercising a power of sale
granted in the Loan Documents or under Applicable Law or by judicial
foreclosure and sale, including a proceeding to confirm the sale, (ii) all
rights of self help including peaceful occupation of property and collection of
rents, set off, and peaceful possession of property, (iii) obtaining
provisional or ancillary remedies including injunctive relief, sequestration,
garnishment, attachment, appointment of receiver and in filing an involuntary
bankruptcy proceeding, and (iv) when applicable, a judgment by confession
of judgment. Preservation of these remedies does not limit the power of an
arbitrator to grant similar remedies that may be requested by a party in a
Dispute.


 


Section 7.06. Successors
and Assigns. This Agreement shall be binding upon the successors and
assigns of each Grantor and shall inure to the benefit of each Grantor (and
shall bind all Persons who become bound as a Grantor to this Collateral
Agreement), the Collateral Agent and the other Secured Parties and their
successors and assigns; provided that
no Grantor may assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Collateral Agent
(given in accordance with Section 7.01).


 


Section 7.07. Setoff. Each
Grantor hereby irrevocably authorizes the Collateral Agent and each Lender and
each of their respective Affiliates at any 


 


29

















 


time and from time to time pursuant to
Section 9.06 of the Credit Agreement, without notice to such Grantor or
any other Grantor, any such notice being expressly waived by each Grantor, to
set off and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Collateral Agent, such Lender or any such Affiliate to or for the
credit or the account of such Grantor, or any part thereof in such amounts as
the Collateral Agent, such Lender or any such Affiliate may elect, against and
on account of the obligations and liabilities of such Grantor to the Collateral
Agent or such Lender hereunder and claims of every nature and description of
the Collateral Agent or such Lender against such Grantor, in any currency,
whether arising hereunder, under the Credit Agreement, any other Loan Document
or otherwise, as the Collateral Agent or such Lender may elect, whether or not
the Collateral Agent or any Lender has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured. The
Collateral Agent, each Lender and the relevant Affiliate shall notify such
Grantor promptly of any such set off and the application made by the Collateral
Agent, such Lender or such Affiliate of the proceeds thereof; provided that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of the
Collateral Agent, each Lender and their respective Affiliates under this
Section 7.07 are in addition to other rights and remedies (including,
without limitation, other rights of set off) which the Collateral Agent, such
Lender or any such Affiliate may have.


 


Section 7.08.
Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.


 


Section 7.09.
Severability. Any provision of this Agreement or any other Loan
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.


 


Section 7.10.
Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.


 


Section 7.11.
Integration. This Agreement and the other Loan Documents represent
the agreement of the Grantors, the Collateral Agent and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Collateral Agent or 


 


30

















 


any Lender relative to subject matter hereof
and thereof not expressly set forth or referred to herein or in the other Loan
Documents.


 


Section 7.12. Governing
Law. This Agreement shall be governed by, construed, interpreted and
enforced in accordance with, the laws of the State of New York.


 


Section 7.13.
Jurisdiction; Consent to Service of Process. (a) Each Grantor
hereby irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement, the other Loan Documents or any Financial Hedging Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State
or, to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement shall affect
any right that the Collateral Agent or any other Secured Party may otherwise
have to bring any action or proceeding relating to this Agreement, the other
Loan Documents or any Financial Hedging Agreement against any Grantor or its
properties in the courts of any jurisdiction.


 


(b)           Each Grantor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement,
the other Loan Documents or any Financial Hedging Agreement in any New York
State or Federal court. Each of the parties hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.


 


(c)           Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in
Section 9.01 of the Credit Agreement. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other manner
permitted by law.


 


Section 7.14.
Acknowledgements.


 


(a)           Each Grantor hereby acknowledges that:  (i) it has been advised by counsel in
the negotiation, execution and delivery of this Agreement and the other Loan
Documents to which it is a party, (ii) neither the Collateral Agent nor
any other Secured Party has any fiduciary relationship with or duty to any
Grantor 


 


31

















 


arising out of or in connection with this Agreement, any of the other
Loan Documents or any Financial Hedging Agreement, and the relationship between
the Grantors, on the one hand, and the Collateral Agent and other Secured
Parties, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor, (iii) no joint venture is created hereby or by the
other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby or thereby among the other Secured Parties or among the
Grantors and the other Secured Parties and (iv) it has the sole responsibility
for, and has adequate means of, obtaining from the Borrower and any other
Grantor such information concerning the financial condition, business and
operations of the Borrower and any such other Grantor as the Grantor requires,
and that the Secured Parties have no duty, and the Grantor is not relying on
any Secured Party at any time, to disclose to the Grantor any information
relating to the business, operations or financial condition of the Borrower or
any other Grantor (the Grantor waiving any duty on the part of any Secured
Party to disclose such information and any defense relating to the failure to
provide the same).


 


(b)           Each Issuer party to this Agreement
acknowledges receipt of a copy of this Agreement and agrees to be bound thereby
and to comply with the terms thereof insofar as such terms are applicable to
it. Each Issuer agrees to provide such notices to the Collateral Agent as may
be necessary to give full effect to the provisions of this Agreement.


 


Section 7.15. Additional
Grantors. Each Subsidiary of the Borrower that is required to become
a party to this Agreement pursuant to Section 5.14 of the Credit Agreement
shall become a Grantor for all purposes of this Agreement upon execution and
delivery by such Subsidiary of a joinder agreement in form and substance
satisfactory to the Collateral Agent.


 


Section 7.16. Releases.


 


(a)           At such time as the Obligations shall have
been paid in full and the Commitments have been terminated, the Collateral
shall be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Collateral Agent and each Grantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Grantors. At the request and sole
expense of any Grantor following any such termination, the Collateral Agent
shall deliver to such Grantor any Collateral held by the Collateral Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.


 


(b)           Subject to Section 3.04(b) of the
Intercreditor Agreement, if any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor (other than to another Grantor) in a
transaction permitted by the Credit Agreement, 


 


32

















 


then the Collateral Agent, at the request and sole expense of such
Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral. Subject to Section 3.04(b) of the
Intercreditor Agreement, in the event that all the capital stock of any Grantor
shall be sold, transferred or otherwise disposed of (other than to another
Grantor) in a transaction permitted by the Credit Agreement, then, at the
request of the Borrower and at the expense of the Grantors, such Grantor shall
be released from its obligations hereunder and under the Guaranty Agreement; provided that the Borrower shall have delivered to the
Collateral Agent, at least ten (10) Business Days prior to the date of the
proposed release, a written request for release identifying the relevant Grantor
and the terms of the sale or other disposition in reasonable detail, including
the price thereof and any expenses in connection therewith, together with a
certification by the Borrower stating that such transaction is in compliance
with the Credit Agreement and the other Loan Documents.


 


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33

















 


IN WITNESS
WHEREOF, the parties hereto have caused this Collateral Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.


 


 


	
   

  	
  GLOBAL GEOPHYSICAL SERVICES, INC., as 

  Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  



 

















 


	
   

  	
  GGS INTERNATIONAL HOLDINGS, INC., 

  as Grantor and Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  



 

















 


	
   

  	
  AUTOSEIS, INC., as Grantor and Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  



 

















 


	
   

  	
  CREDIT
  SUISSE, CAYMAN ISLANDS 

  BRANCH, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title: